Positive Greek deal announced

The Single European currency was
unperturbed as Eurogroup members reached a conditional response to
Greece’s necessary fiscal measures. They have approved to cut debts
by €40bn and have cemented the way for releasing the next tranche
of bailout loan. EU leaders emphasised during their press
conference that Greek uncertainty has been resolved and praised the
Greek government for their strong pledge to achieving a sustainable
future. The written statement suggests Greek aid “contingencies”
would provide that Greece must continue to form its reserve account
which is used to reduce debt, while the IMF is demanding that
Greece must give up work a portion of its unpaid sovereign debt.
But, this job may be tough as the statement also documented the
“deterioration” to the economy which might lead to cash flow
difficulties.

Over to the US and Consumer
confidence this afternoon is expected to show the highest reading
for four years reaching 73.0 for November. The data arrives
alongside improvements in household sentiment could see further
support for the Greenback reducing pressure on the Fed for
additional monetary support. The head of the Fed Ben Bernanke
predicts a more broad-based recovery and we should see the central
bank move away from its easing policy and the FOMC may continue to
sit on the side-lines as the December 12 meeting as the region gets
on a more sustainable path.

Back to the UK and yesterday we saw
Canadian central bank Chief Mark Carney named as new Bank of
England governor. The former Goldman Sachs manager has a strong
reputation and has been praised for this ‘pragmatic’ response to
the financial crisis during his reign in Canada. He is considered
more hawkish that King following a rate rise in Canada to offset a
housing bubble and may lead to the UK reducing QE and look to a
rate increase in the near future. The appointment is the first
foreign head of Britain’s central bank in 318 year history and he
will be the one of the most influential unelected officials in the
UK.

This morning we have UK GDP which
is expected to be revised down for Q3 from the inflated 1% figure
announced last month. As mentioned above we have Consumer
Confidence from the US as well as Durable Goods Orders earlier in
the afternoon so expect some volatility on EURUSD and Cable. Will
we see a continuation of the positive sentiment in US data to see
further Greenback support?